MATTERS OF PUBLIC IMPORTANCE Economic Competitiveness

Mr HUSIC (Chifley) (16:04): The member for Bowman went through a number of facts, but the problem is that listeners were not able to see that the member for Bowman employs a fact kaleidoscope. He picks up his notes, he rolls them into a column and then he just twists that paper until it spits out the type of rhetoric that he put forward then. On a whole range of levels he puts statements forward that look great through the fact kaleidoscope but they do not have any bearing to reality whatsoever. There was reference to productivity. We often have this mantra from the other side that says productivity is declining. Yet in March this year Ross Gittins, who is respected as an economic commentator, looked at the national accounts released in December and said:

In case you're wondering, the national accounts showed that, on the simplest measure—gross domestic product per hour worked—the productivity of labour improved by a roaring 3.5 per cent over the year to December.

But I think the best way to see what's been happening is this: using the trend (smoothed seasonally adjusted) figures for labour productivity in the market sector, it's been improving at the rate of 0.5 per cent or better for seven quarters in a row.

For seven quarters in a row, productivity was going up, despite what they are saying.

We also heard a statement about costs. I do recall John Howard in this chamber as Prime Minister going on about how wages growth kept going up and up, and that they likened themselves to 'the best friend the worker ever had'. The reason wages were going up was that for years the RBA had warned that side of the chamber that capacity constraints, chiefly in skills shortages and infrastructure blockages, were going to cripple the economy, but they did nothing about it. They duplicated the TAFE system, because they refused to fund vocational education through federal-state agreements. They had all the skills shortages starting to cripple the economy, and wages were going up as a reflection of the reality that there were not enough people around to do the work and costs had to go up to attract labour. That was what they were going on about in terms of costs. These people opposite, when we contrast it in terms of their record, cannot be believed in relation to the types of things that are put forward here.

They talked about the competitiveness report that has been released but I actually think it is worth noting that the other report that has come out through the OECD, the Economic Outlook that has just been released, says we will outperform every single major and advanced economy over the next two years. Take growth this year alone. Our growth will be double the average of the OECD. It says of Australia that we will have growth of 2.6 per cent in 2013, 3.2 per cent in 2014. In the OECD it will be 1.2 per cent—so 2.6 per cent this year for Australia, 1.2 this year for the OECD, 2.3 next year for the OECD, 3.2 next year for Australia. So inflation contained in Australia, employment at 5.6 per cent this year in Australia, and 5.5 next year, and in the OECD 8.1 per cent this year and eight per cent next year. That is eight per cent next year compared to our 5.5 per cent next year. You cannot be competitive if growth in your economy has stalled, if inflation is driving costs up, if unemployment is high. And you only need to look at this, for example, as I have reflected on a number of times: imagine the political discourse in this country if we had Spain's unemployment rate of over 20 per cent—so over 20 per cent in Spain compared to 5.6 per cent here in Australia. If people do not have work, if people have costs going through the roof and if growth is non-existent, you cannot be competitive—and that competitiveness has been brought in as a result of the stewardship of this government given the fact that we have been able to ensure that economic conditions here—as has been reflected—will outperform those of every single major advanced economy over the next two years.

Now in terms of the report that has been released, and it is actually worth while noting that it was done in conjunction with the Committee for Economic Development of Australia, Stephen Martin says, 'There seems to be a general lack of awareness of how good Australia's economy is performing in a global context.' I go back to those statistics that I have related to the House a few moments ago. It is very important that in a global context we are seen as performing as strongly as we are. He continues on to say, in terms of two key indicators, unemployment and economic growth, that Australia's growth is strong and stable compared to other countries', despite others making significant gains as they continue to recover from the GFC and the eurozone crisis and it also highlights our highly skilled workforce—as does the report—and effective legal system. It is clear the fundamentals of our economy are strong and we have a world-class financial system, low government debt, low interest rates—again, low interest rates of themselves are very important too particularly for the non-mining sector as it is trying to deal with one of the biggest handbrakes on competitiveness for Australia, that being the phenomenally high Australian dollar where our economy is seen overseas as a safe haven when it comes to discussions about currency. So it is important to note that.

I come back to the point I made earlier about capacity constraints particularly in relation to skills and infrastructure. On skills, I refer to the investment we have made in my own area. I am proud of the fact that $140 million has been invested in 67 schools across the electorate of Chifley and we have had trade training centres opening up as well, providing for greater vocational training and improvement of skills in our area. On infrastructure, particularly urban infrastructure, we are proud of the fact that under this government investment in urban infrastructure is the highest it has ever been. Those opposite, when it came to urban planning and when it came to making our cities more effective—particularly for business and in terms of removing congestion and lifting people out of the daily grind particularly as it comes to road and rail investment—vacated the field and we have gone back in to try and work with state governments to fix these things up. On the NBN, for instance, those opposite, who have had this longstanding commitment to tear the NBN apart, now want to charge up to $5,000 for small businesses to connect to the NBN, which, by every account and by any measure that you look at, has lifted productivity in this nation and has contributed significantly to economic growth. Those opposite do not see how it opens up, in terms of export markets, the ability for small business to take advantage of what is there on the world stage. Those opposite, in particular the shadow Treasurer—and I reflect on his contribution—talk about costs. Yet here they are proposing to introduce a scheme that adds to corporate tax 1½ per cent with 3,300 companies levied as a result of that—$5 billion. How is it that putting a levy on those 3,300 businesses in this country makes them more competitive on the world stage? Absolute silence!

Mr Lyons: And they love tax.

Mr HUSIC: As the member for Bass says, they love tax—and they certainly love putting this levy on. How does that improve competitiveness in this nation? The shadow Treasurer made a remark about free markets and advocating free markets, which I thought was a refreshing change and I welcome his new-found love of free markets. When we introduced a method of moving to a market based price on carbon, those opposite actually wanted to stop that. They want to subsidise polluters—pay $5 billion out of government coffers to polluters—and yet there is this additional cost to the government and also the fact that it will do little, if anything, in terms of cutting emissions and will make it even harder for them to make the bipartisan target we both agreed within this place that we will cut emissions by five per cent by 2020—but no reference to it.

I come to the other thing that they talk about. When they talk about costs, bear in mind the biggest cost in a business is labour. The thing that those opposite had a problem with when skill shortages were driving up labour costs was that the only way they could fix it was to bring in a draconian set of industrial laws that undermined the ability of labour to negotiate enterprise agreements on wages and conditions. Work Choices was their way of dealing with their own inability to rein in labour cost increases because of skill shortages. Those opposite also talk about regulation. The biggest thing that they did, in terms of cutting regulation, was to bring in a GST that made two million small businesses tax collection points across the country. You never hear that from them either. So if you are going to talk about competitiveness, look at their record, look at the way that they performed in government and recognise— (Time expired)




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Ed Husic MP
Federal Labor Member for Chifley


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